From the introduction:
In a lost age, the world is divided into four nations: the Water Tribes, the Earth Kingdom, the Fire Nation, and the Air Nomads. Within each nation, there is a remarkable order of men and women called the "benders" who can learn to harness their inborn talent and manipulate their native element. Bending is a powerful form combining martial art and elemental magic.
In each generation, only one bender is solely capable of controlling all four elements. That bender is the Avatar. The Avatar is the spirit of the world manifests in human form. When the Avatar dies, it reincarnates into the next nation in the cycle. Starting with the mastery of his or her native element, the Avatar learns to bend all four elements. Throughout the ages, the countless incarnations of the Avatar have served to keep the four nations in harmony.
Then, the firebenders attacked. Just as the world needed the Avatar the most, he mysteriously vanished. A hundred years later, the Fire Nation is near final victory in its ruthless war of world domination. The Air Nomads were destroyed, the Air Temples ravished, and all airbender monks eradicated. The Water Tribes were raided and driven to the brink of extinction. The Earth Kingdom remains and fights a hopeless war against the Fire Nation. Many believe the Avatar was never reborn into the Air Nomads and the cycle is broken.